Crowdsourcing Case Study

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Managerial factors, include the management of costs, risks and coordination. Even though cost effectiveness is a major decision crowdsource, the budget of the project affects this decision. While crowdsourcing projects, budget plays an important role which in turn influences the decision to crowdsource. Usually projects with limited budget tend to crowdsource. For example, Wikipedia uses crowdsourcing to help write its vast amount of articles because of limited budget. But these project will only be successful if firms employ skillful and experienced people to manage these activities. Poor management may result in substantial delays and drain of resources. So if a firm does not have sufficient human resources to even manage such vast crowdsourcing project then they might be better off outsourcing the project. While managing risk, the risk of poor quality should be considered as the crowd consists of large unknown and undefined people. The nature of Tasks plays a role in decision to crowdsource, since the crowd can be good for certain tasks but not for other tasks. The collection method of finished tasks from workers, the relation between organization and members during crowdsourcing activities comes under tasks factors that affect decision to crowdsource. Since tasks in crowdsourcing are sent to anonymous members in the crowd, there might be some issues with privacy, security, intellectual property and sensitive information. If it is possible to handle sensitive information by segmenting a task into smaller tasks so that the overall picture is concealed or else if the tasks are too secure then it’s not possible to crowdsource it (Thuan , Antunes, & Johnstone, 2013).

4. Describe the advantages and disadvantages of crowdsourcing.

Crowdsourcing has different advantages in,

Product Development: Crowdsourcing offers number of opportunities for the improvement and enhancing the external product. For example, “Dell” and “Star bucks” uses user contribution for product development and some firms like P&G and Fluevog uses crowdsourcing for active user participation when a problem pertaining to a product arises.

Cafepress.com is an example of crowdsource product development where anyone can sign up, propose a product and start selling later. Quirky is another crowdsource innovator similar to Cafe press, only difference is that an idea proposed by a user will be subjected to voting, if the product exceeds 500 or some fixed number of presale orders then the idea will be sent to production.

Cost Reduction: The economic and financial crisis have forced companies to reinvent their strategies and business models by constantly using technology to reduce costs, resources and manpower. Crowdsourcing helps set a price that is minimal and allows significant savings for firms. When a project is being outsourced to internet users, organizations have access to large members with talent, it saves the cost that is spent on acquiring expert human resources and paying them full time salaries (Digoul, Azouri, Decaudin, & Rochard, 2013).

Innovation: Crowdsourcing spurs innovation by letting customers fix the prices of a product that they wish to acquire. For example, Meyers Motors is an automobile manufacturer who recently created a 2 seat/three wheel car. The firm placed an offer of a 1000$ reduction in the cost of the car if more than 200 cars are bought before the official launch of the product. These kind of strategies allow users to fix the price of the car. It is a form of innovation by reduction of costs and increasing profit margin (Digoul, Azouri, Decaudin, & Rochard, 2013).

Communication: By involving consumers in a company’s communication campaign, a firm can raise its brand awareness. Example: Danone allows users to determine the tastes of the new danettes by website. Another advantage is, if a firm has to establish a new logo or need to uses some images on their websites, they have to hire professional photographers or designers for that work and it can be quite costly. But with the help of crowdsourcing there has been development of new platforms like Getty images and istockphoto, logos or images will be created by a community of designers who will charge much less than a professional (Digoul, Azouri, Decaudin, & Rochard, 2013).

Disadvantages:

Labor Exploitation: Since crowdsourcing is a form of outsourcing, if an individual is looking for a full time job, all he/she will be able to find temporary jobs with little salaries because of crowdsourcing. It only helps in increasing cut throat competition among professionals. For example, if a firm needs to hire 5 full time employees to do a task, it can now hire 500 workers with 10 times less salary. It decreases the value of professional fields and high cost degrees (Simula, 2013).

Organizational Resistance: There may be some resistance in ideas generated by crowd while applying them to develop products form with in the company. Because of cultural differences, usually ideas generated within the company are met with resistance, we can only imagine the resistance if the ideas are generated by outside users.

Employee Morale: Even though companies seem to enjoy the wide variety of skills brought to the table by large number of workers, employees might be threatened about the idea that even their work can be crowdsourced and they might be unemployed (Monaco, 2012).

References

Albert, D. (2013, April 3). Crowdsourcing vs. Outsourcing: A Side by Side Comparison. Retrieved from http://blog.lionbridge.com/: http://blog.lionbridge.com/enterprise-crowdsourcing/2013/04/03/crowdsourcing-vs-outsourcing-a-side-by-side-comparison/

Amazon. (2005-2015). Amazon Mechanicla Turk. Retrieved from mturk: https://www.mturk.com/mturk/help?helpPage=worker

Bartolini, C., & Vukovic, M. (2010). Towards a Research Agenda for Enterprise Crowdsourcing. Springer. Retrieved from http://link.springer.com/chapter/10.1007%2F978-3-642-16558-0_36

Digoul, J., Azouri, M., Decaudin, J.-M., & Rochard, S. (2013, Novemebr). Crowdsourcing, Outsourcing to Obtain a Creativity Group. Sciencedirect. Retrieved from http://www.sciencedirect.com/science/article/pii/S2214462513000030

Guittard, C., & Schenk, E. (2009). Crowdsourcing: What can be Outsourced to the Crowd, and Why ? Hal Archives. Retrieved from https://halshs.archives-ouvertes.fr/file/index/docid/439256/filename/Crowdsourcing_eng.pdf

Kittur, A., Chi, E. H., & Suh, B. (2008). Crowdsourcing User Studies With Mechanical Turk. Acm. Retrieved